INVESTOR RIGHTS

                                  EXHIBIT 10(Y)
                                  -------------

                               Catherine M. Vaczy
                            140 East 28th Street #11C
                               New York, NY 10016

Phase III Medical, Inc.
330 South Service Road
Suite 120
Melville, New York  11747
Attention:  Mark Weinreb, President & CEO

As of December 22, 2005

Dear Mark:

As you know, at a meeting of the Board of Directors held on December 22, 2005, I
agreed and the Board  approved a total of  $25,000  of my  accrued  salary  (the
"Converting  Salary") be converted  into shares of the  Company's  common stock,
$.001 par value (the "Common Stock").  The price at which the Converting  Salary
will be converted  into shares of Common  Stock is $.06 per share,  which is the
closing price of the Common Stock on the date of such agreement,  resulting in a
total of 416,666 shares (the "Shares") being issued to me as of the date hereof.
We both confirm that appropriate  withholding taxes must be paid with respect to
the Shares.  These shares carry the same registration  rights as my other shares
purchased from the Company.

In connection  with my purchase of the Shares I hereby make to you the following
representations in which I am hereafter referred to as "Investor":

(a)  The  Investor  hereby  represents  and  warrants  to the  Company  that the
Investor is an  "accredited  investor" as that term is defined in Rule 501(a) of
Regulation  D  promulgated  under the  Securities  Act of 1933,  as amended (the
"Securities  Act").  Specifically,  the  Investor  certifies  that  (initial all
appropriate spaces on the following pages):

           CMV ___       (1)  The Investor is an accredited  investor because he
            (Initial)         has an individual net worth, or with his spouse as
                              a joint net worth,  in excess of  $1,000,000.  For
                              purposes of this Agreement,  "net worth" means the
                              excess  of  total  assets  at fair  market  value,
                              including home, home  furnishings and automobiles,
                              over total liabilities.

             _______     (2)  The Investor is an accredited  investor because he
            (Initial)         has  individual  income  (exclusive  of any income
                              attributable  to his spouse) of more than $200,000
                              in each of the past  two  years,  or joint  income
                              with his spouse in excess of  $300,000  in each of
                              those years, and such investor  reasonably expects
                              to reach  the  same  income  level in the  current
                              year.

             _______     (3)  The Investor is an accredited  investor because he
            (Initial)         is  a  director,  executive  officer